The Egyptian Exchange (EGX) is working on a proposal to allow individuals to trade treasury bills in the secondary market. The proposal will be submitted to the Financial Regulatory Authority soon, as part of EGX’s development strategy, sources told Daily News Egypt.
The sources said that the proposal was motivated by the recent surge in treasury bill trading, which was enabled by the EGX. This boosted demand, eased trading operations, and attracted more investors, especially individuals.
Trading treasury bills in the secondary market started at the end of October last year, through the EGX’s screens. This was a step towards developing the securities market, one of EGX’s strategic goals.
This also coincided with the shift of depositing, safeguarding, and settling government debt instruments from the Egyptian Company for Clearing and Settlement to the “Egyptian Central Depository & Registry Company for Securities & Treasury Instruments”. This was a key step to activate the agreement with Euroclear, which aims to bring more foreign investments to the local debt market.
The sources added that once the proposal is approved by the Financial Regulatory Authority, the EGX will start the process of enabling treasury bill trading for individuals through its screens. This is expected to increase trading volumes to record levels.
Treasury bills are government bonds, issued for periods ranging from 3 to 12 months. The Central Bank sells them on behalf of the Ministry of Finance to major dealers, who represent the primary market. They then sell some of them in the secondary market.
